As is known, on May 21, newly elected President Volodymyr Zelenskyy signed a decree dissolving the Verkhovna Rada. The main argument for dissolving parliament was the extremely low level of public confidence in members of parliament—4%. The public perceived this news as a sign of hope that new faces in parliament would begin to address issues that matter to ordinary people, rather than relying on cash flow, as has been the case for decades. However, reality shows that long-standing and entrenched corrupt officials have no intention of leaving their comfortable and rather lucrative parliamentary seats. What frightens them most is the loss of influence and parliamentary immunity, which allows them to plunder the budget and the long-suffering population with impunity. One such corrupt official will be discussed today.
The leader in the misappropriation of public funds and the embezzlement of Ukrainians' wealth is undoubtedly Oleksandr Tretyakov, a BPP MP who shows no signs of relinquishing his seat and is running for parliament for the sixth time in the 219th single-member constituency – the Svyatoshinsky district of the capital. Indeed, with people like him, we're unlikely to see a renewed Verkhovna Rada. This so-called politician needs no introduction. His "exploits" have long been widely publicized. We'll simply remind hopeful voters of some of them, so they can make the right decision when they cast their ballot on July 21.
On March 2, 2017, NABU officers detained controversial official Roman Nasirov, then head of the State Fiscal Service of Ukraine. He was arrested in connection with a criminal case involving MP Oleksandr Onyshchenko. Nasirov was accused of abuse of power or official position. As a result of Nasirov and Onyshchenko's joint activities, the Ukrainian budget lost 3 billion hryvnias.
Given that Nasirov began feigning a serious illness after his arrest, NABU officers decided to transfer the official from Feofaniya to another clinic to confirm or refute the diagnosis. That's where our lawyer for corruption, and also a BPP MP, Oleksandr Tretyakov, came in. The MP persistently obstructed Nasirov's transfer from Feofaniya. NABU officers noted that the MPs who prevented their employees from transporting Nasirov to a specialized medical facility for examination had violated the law.
And this is far from the only time Tretyakov has defended notorious corrupt MPs. His stance on the law demonstrates that he has no interest in holding bribe-takers and embezzlers accountable. Tretyakov also did not vote for the creation of an independent anti-corruption court in Ukraine. All of his "achievements," which contribute to the spread and entrenchment of corruption in our country, are vividly described on the website of the "Sickle by Rating" project. We, however, considered it our responsibility to convey to voters what we consider to be Mr. Tretyakov's main "achievement"—his business, which has a distinctly criminal tinge. A business that deserves the special attention of not only voters but also law enforcement agencies.
There's a company in Ukraine called the "Ukrainian National Lottery," which, under the guise of state lotteries, operates actual casinos, which have been banned by law since 2009. One of the main owners of this company is Oleksandr Tretyakov, a member of parliament from the BPP. We present to you an investigation by our colleagues at the English-language Ukrainian publication Kyiv Post. Translation by us.
Despite the ban, shadow gambling businesses are operating in lottery halls.
Although gambling has been banned in Ukraine since 2009, gambling establishments can be found on virtually every city street. Under the guise of flashy state lottery signs, these establishments allow gamblers to circumvent the country's gambling ban. Legal loopholes allowing shady companies to operate began to open in 2012, when the Ukrainian parliament, then controlled by fugitive former Ukrainian President Viktor Yanukovych, relaxed the gambling ban.
The weak law lacked effective mechanisms to regulate the activities of state lottery license holders. This allowed operators to open illegal gambling halls under the guise of regular lotteries. This law created an environment ripe for fraudsters who open online gaming parlors under the guise of lottery establishments, as well as for those who cover up illegal businesses by accepting truly exorbitant bribes from their owners.
As a result, the state budget receives only about $2 million per year in tax revenue from real lotteries, and another $4 million from taxes paid by lottery winners. Meanwhile, according to Antimonopoly Committee spokesperson Agiya Zagrebelskaya, the owners of illegal gambling halls masquerading as lotteries receive approximately $1 billion per year in undeclared cash.
"This money could have been channeled into the state budget to finance the construction of stadiums, schools, and so on," Zagrebelskaya said. "But instead, it ends up in someone's pockets."
How does it work
The sign outside a business in Kyiv's Troyeshchyna neighborhood depicts the "Golden Cup" lottery. Its windows are covered in blue film, used by the casino's owners to conceal their criminal activities. The sign identifies it as a branch of the Ukrainian National Lottery. But there are no lottery tickets on display. Instead, there are rows of computers, their keyboards configured to simulate slot machines.
Visitors purchase a plastic gambling card with a minimum deposit of 100 hryvnias, or about $3,50. The card is inserted into a slot on the keyboard, and the computer turns into a slot machine. Gambling establishment staff recommend that beginners start with the virtual fruit machine, a classic slot machine game. It's simple and inexpensive—each pull of the virtual one-armed bandit costs just 50 kopecks, or less than two cents.
Customer ID or player age? No questions were asked. Photography and video recording are prohibited, but alcohol consumption and smoking are permitted on the premises. Only cash is accepted. Troyeshchyna's "Golden Cup" is just one of tens of thousands of illegal gambling parlors in Ukraine. They can be seen everywhere in Kyiv and other major cities: windows covered in film, doors always locked, lottery logos everywhere. For such a ubiquitous industry, it remains surprisingly unnoticed by the law.
The market is in chaos
No one knows exactly how many illegal gambling halls disguise themselves as lotteries. It's no surprise, given how chaotic and unregulated this market is in Ukraine. There are only three state-licensed lottery operators: MSL, Patriot, and the Ukrainian National Lottery. Their licenses expired in 2014 and were never renewed, yet they continue to operate. A controversial clause in the lottery law allows them to continue their illegal activities until a new license is issued.
And government agencies are in no hurry to issue new licenses. In March, the Ministry of Finance approached the government with a plan to obtain new gambling licenses, but it was rejected. The Antimonopoly Committee believed this proposal would favor the largest operator, the Ukrainian National Lottery, and lead to market monopolization. We know that there are at least 15,000 lottery establishments in Ukraine, as by law each of the three licensed operators must open at least 5,000 parlors.
But that's not all. Despite their own licenses having expired, the three operators sold franchises to approximately 180 different lottery retailers and betting agencies, which opened their own branches. However, only 19 percent of all lottery offices in Ukraine actually sell lottery tickets, according to a report by the Antimonopoly Committee on the Lottery Market published in February 2018. The rest operate solely as gaming halls or betting agencies—both of which are illegal.
Hidden schemes
The Ministry of Finance believes that legalizing gambling in Ukraine could solve this problem. "But that's easier said than done. Over the years, the issue has become highly politicized: certain political forces lobby the interests of illegal gambling businesses in parliament," Tatyana Ostrikova, a member of parliament from the Samopomich party and a member of the Verkhovna Rada Committee on Tax and Customs Policy, told our publication. "Meanwhile, not only is the law enforcement system inactive, but corrupt law enforcement officers themselves often cover up illegal casinos and gambling halls. A complete ban on gambling only pushes this market further into the shadows," Ostrikova said.
According to the MP, seven bills legalizing gambling have been submitted to parliament, but the tax committee cannot recommend any of them, as each one is aimed at rigging the market for someone's benefit.
"Furthermore, not a single bill proposes a mechanism for effective control of online gambling," Ostrikova added.
Lack of supervision
"The loopholes in the 2012 lottery bill mean there's no oversight of what online software operators use or how much money they earn," Georgy Lozhenko, president of the MSL lottery operator, told our publication. In 2018, police opened 245 criminal cases for illegal gambling and referred 80 to court, but this hasn't stopped the expansion of the gambling hall network.
"The reason police rarely hit the jackpot with their surprise raids is because of the nature of the business," said Zoryana Toporetskaya, a lawyer specializing in gambling. "All the gaming halls were connected to the network, and now they can turn off the gaming software and turn on the lottery software with a single click as soon as they see the police approaching," she said.
Market reshuffles
Since 2012, the Ukrainian lottery market has been divided between three private companies: MSL, the Ukrainian National Lottery, and Patriot. All are registered abroad in offshore jurisdictions. Their licenses expired in 2014, but they are allowed to continue operating until new ones are issued. The market was turned upside down in 2015. Before this, Patriot was the largest lottery network in Ukraine, MSL was the second largest, and the Ukrainian National Lottery was the smallest.
But in September 2015, two market leaders, MSL and Patriot, were sanctioned by the National Security and Defense Council on suspicion of terrorist financing. Authorities claimed that both companies had Russian businessmen among their owners. An investigation found no evidence, and the sanctions were lifted in May. However, over the past two and a half years, a third operator, Ukrainian National Lottery, has emerged as the leader.
"Before the sanctions, the Ukrainian National Lottery held about 15 percent of the lottery market; after the sanctions, it's 85 percent," Toporetska said. In 2017, the company's turnover was 934 million hryvnias—three times more than MSL's 308 million hryvnias. This was reported by the website Bihus.info in May. The former leader of Patriot has virtually disappeared from the market, reporting only 300,000 hryvnias.
The Ukrainian National Lottery did not respond to repeated requests for comment on this situation. Patriot's corporate phones were not answered.
MSL President Lozhenko says his competitor benefited from the sanctions, but calls this "normal." "This is a normal way of competing with power," he said. "I don't know whether our competitors did this on purpose or simply benefited from the situation."
Who is doing this?
The ownership structures of lottery operators can be as complex as the market itself. Lottery operator MSL is owned by Evolot Ltd., registered in Cyprus. The company claims that its beneficial owner is Cypriot businessman Markos Shiapanis. The Ukrainian National Lottery is more complicated. As of 2014–2015, it was owned by Olympic Gold Holdings Ltd., a company registered in the British Virgin Islands, one of the most secretive offshore jurisdictions.
Swiss citizen Peter Shetty stated that in 2015 he became a co-owner of Olympic Gold Holdings Ltd. along with Ukrainian businessman Valeriy Kovalenko and other undisclosed shareholders, whose names he declined to disclose. At some point afterward, the lottery operator was acquired by Rui Bo Investment Limited, a Hong Kong-based company. According to the Ministry of Justice's registry, the company is owned by British citizen Michael John Foggo. We were unable to obtain comment from him, as he did not respond to inquiries.
Foggo appears in leaked offshore databases as the director of a Malaysian company, Totech Global Ltd. A company with this name sells dehumidifiers. Ukrainian media attribute the success of the "Ukrainian National Lottery" to his alleged connection to Oleksandr Tretyakov, a member of parliament from the Petro Poroshenko Bloc, the largest faction in the Ukrainian parliament with 135 seats.
Tretyakov categorically denied any affiliation with the company, but nevertheless appeared during a 2015 SBU search of the Ukrainian National Lottery's offices. In 2016, he told the Ukrainian television channel 2+2 that he had the option to purchase shares in the Ukrainian National Lottery and intended to do so when his parliamentary term expired. Tretyakov, while evading comment, never explained how or when he acquired the option to purchase shares in the Ukrainian National Lottery. However, three unrelated sources in the Ukrainian parliament and the lottery industry told us that Oleksandr Tretyakov, a member of parliament from the Petro Poroshenko Bloc, is the Ukrainian National Lottery's main lobbyist in parliament.
For obvious reasons, representatives of the Ukrainian National Lottery deny Tretyakov's affiliation with their company, as they have repeatedly stated on their official website. They also deny any clearly criminal activity. "The Ukrainian National Lottery operates transparently and in accordance with Ukrainian law," reads a statement distributed by the media.
Bookmaker agencies
Indeed, the Ukrainian National Lottery did not violate the law even when it sold its lottery franchises to international betting agencies, which have also been banned in Ukraine since 2009. International bookmakers Parimatch and Favorit Sport circumvented the betting ban by registering as lotteries.
The Verkhovna Rada website defines a lottery as a game in which players guess the outcome of a sporting event. "In reality, things aren't so simple with betting agencies. If you call your business a bookmaking agency, you're illegal. But if you call it a 'lottery,' then it's legal," commented Irina Sergienko, director of the law firm Fomin, Sergienko & Partners and a leading lawyer specializing in gambling and sports.
Even on their websites, Favorit Sport and Parimatch make no secret of their international betting licenses. "Betting is indeed prohibited in Ukraine, but Parimatch is fighting for its legalization," the bookmaker's press service reported, although it declined to comment in detail.
The State Fiscal Service of Ukraine sees no problems with international betting agencies operating in Ukraine, as they are registered as lotteries in the Ministry of Finance's online lottery registry. "The unregulated lottery market, where the state doesn't control cash flows or impose strict rules for businesses or even game types, and has no enforcement mechanisms, has allowed even banned betting agencies to pretend to be lotteries," Lozhenko said. "They simply bought franchises and registered as lotteries—because they can."
This investigation makes everything crystal clear. Mr. Tretyakov's primary interest in parliament is immunity, which allows him to increase his net worth by hundreds of millions of dollars annually, unscrupulously robbing ordinary Ukrainians, including his constituents, while skillfully disguising his concern for ATO veterans. In the Verkhovna Rada, he chairs the Verkhovna Rada Committee on Veterans, Combat Participants, Participants in the Anti-Terrorist Operation, and Persons with Disabilities.
With the start of the election campaign, the media began to fill with heart-wrenching news about Tretyakov's concern for veterans, his internet-fueled promises, and his self-praise. But if you search the internet for any specific details about the MP, you'll find absolutely nothing. Perhaps just another investigation into his criminal activities. For example, another exposé by investigative journalists from the EU-funded Wikiinvestigation project. The journalists claim that MP Tretyakov's Ukrainian National Lottery company may be directly connected to Russian intelligence agencies.
Finally, I'd like to remind NABU representatives about the undeclared apartments in Israel that Mr. Tretyakov "forgot" to declare. Now is the time to remember. Incidentally, Yaroslav Babiy, a defendant in this case, remains Tretyakov's assistant to this day.
So the question arises: Should we vote for Mr. Tretyakov in the snap elections to the Verkhovna Rada of Ukraine? Or is it better to hand him over to the competent authorities, thereby ridding the country's budget and the population of a greedy, brazen, and unprincipled corrupt politician?
Spring may have passed, but it's never too late to plant. So, shall we do them together?
In topic: The CEO of Kolomoisky's holding company met with MP Tretyakov.
A player was unable to sue the Tretyakov lottery for his winnings.
ORD, based on materials from “Kyiv-Post”
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